Five Small Business Benefits of Digital Tax
This is the concluding blog post in our digital tax series. We’ve already looked at digital tax readiness and how small businesses can prepare; here we consider the benefits to small businesses of going digital with tax.
Businesses that overhaul manual processes with digital ones can reap the time and cost saving rewards of automation. These are compelling reasons, but digital solutions can also improve how companies interact with other organizations.
Manual processes don’t easily connect into external systems and when it comes to managing tax, this can mean that companies end up spending valuable time duplicating information.
The UK government encourages businesses to get on board with digital tax to automate as much as possible the collection and processing of tax-relevant information and to equip businesses to keep track of their tax affairs online.
Change is daunting, but small businesses stand to gain from making the switch from manual to digital tax. The benefits reaped include:
- Time savings digital tax aims to create a one-stop shop for managing tax affairs, eliminating the need to interrogate multiple files and systems to pull tax information together. Information is shared throughout the year as part of day-to-day record-keeping rather than in one end-of-year frenzy
- Budget management if tax is due, companies can manage how they will pay it through their online account
- Increased accuracy by connecting systems that hold tax-relevant information, and obtaining data from source records, tax calculations can be more accurate. It’s a similar concept to smart meters from energy providers – by collecting data at source they eliminate the need to separately record the information
- Visibility and control no business likes to get an unexpected bill at the end of the year. With digital tax management, companies can stay on top of their tax situation throughout the year and have more control over their tax affairs
- Convenience and connectivity businesses can connect tax management into other finance management systems for speed and convenience. Some companies will choose mobile apps to keep an ongoing financial record as and when change happens and can connect other providers, such as accountants into these to give them a real-time view of the ongoing situation.
With digital processes and systems, businesses can connect up the various ways they manage day-to-day activities for smoother end-to-end processes and efficient levels of automation. Companies that save many manual hours pulling tax information together can reinvest this time into value-added activities to grow the business.